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Netflix (NFLX) Free Downloaders, Beware! The company is stepping up password sharing.
The company warned in a quarterly letter to shareholders that it will continue to step up its efforts to combat password sharing, following fourth-quarter earnings results that saw the number of subscribers jump more than expected.
“Later in Q1, we expect to begin a broader rollout of paid sharing. Today’s expanded account sharing (100M+ households) is a long-term investment in improving Netflix and building our business,” he said.
The company explained that it is building more new features to improve the overall Netflix experience, including the ability to review which devices members are using their account on and move a profile to a new account.
Members can pay extra if they want to share the platform with non-residents.
“As we work through this transition — and as some borrowers stop looking or don’t convert to an additional membership or full-payment account — word of mouth engagement may be negatively impacted in the near term, as measured by third parties such as Nielsen The Gauge.” he said.
However, the company cited recent testing in Latin America, which showed an increase in engagement as borrowers signed up for their own accounts and new content was released.
Investors will be closely monitoring the company’s earnings call for further updates on its stance on password sharing, in addition to its newly launched ad-supported phase.
Netflix sees the two initiatives as drivers of profitability, especially as competition in the streaming space increases.
Quarterly net additions grew by 7.66 million, more than 4.5 million from the company’s leadership amid highly popular and record-breaking content releases, including “Glass Onion,” “Troll,” “All Quiet on the Western Front,” “My Name.” Including it’s Vendetta, and it’s “Wednesday.”
Although the company missed the top and bottom lines, guidance came in strong with revenue estimates for the first quarter of 2023, with revenue of $8.17 billion expected to come in at $2.82 per share.
In between earnings announcements, Netflix CEO and founder Red Hastings announced that he would be stepping down from the company’s leadership role. COO Greg Peters will join current Netflix CEO Ted Sarandos in that role. Hastings now serves as the company’s executive chairman.
Shares of Netflix rose as much as 6 percent in afternoon trading after Thursday’s results.
Shares of Netflix have been on a tear in recent weeks, up roughly 60% over the past six months, and have gained nearly 10% so far in January, outperforming the Nasdaq Composite’s 5% gain.
Alexandra is a senior entertainment and media reporter at Yahoo Finance. Follow her on Twitter. @alliecanal8193 And email me at alexandra.canal@yahoofinance.com
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